Q3 2023 Market Update: Hurricane Season & Market Shifts in St. Johns County
By Inna Moskalyk
Oct 7, 2023
Tags:Market Reports
The third quarter of 2023 marked a clear turning point for St. Johns County real estate. As interest rates climbed toward historic highs and inventory continued to build, the market's transition from seller-dominated to more balanced became unmistakable. Add in an active hurricane season, and Q3 2023 offered plenty of developments to unpack.
Q3 2023 Market Statistics
The numbers confirmed what buyers had been hoping for: more options and growing leverage.
- Inventory – Approaching 4 months of supply in some St. Johns County areas-up significantly from the sub-3-month levels of early 2023
- Market Balance – Clear transition toward a more balanced market, though still not fully buyer-favored
- Negotiating Power – Buyers gaining some leverage, particularly on homes priced above market
- Price Growth – Slowing significantly compared to the rapid appreciation of 2021-2022
Interest Rates Approach Historic Peak
The defining story of Q3 2023 was the mortgage rate environment. Rates climbed relentlessly through the summer, ultimately reaching approximately 8% by October-the highest levels in over two decades.
According to Freddie Mac historical data, this represented a dramatic shift from the sub-3% rates many buyers had locked in just two years earlier.
The rate shock significantly impacted affordability. A buyer who could have qualified for a $500,000 home at 3% found their purchasing power reduced substantially at 8% rates.
Hurricane Season Impact
Hurricane Idalia made landfall in Florida in August 2023, though St. Johns County was largely spared from major damage. However, the storm served as a reminder of Florida's hurricane risk and its impact on the real estate equation.
- Summer Haven – Beach erosion prompted a $2.5 million state allocation for home buyouts in affected areas
- Insurance Costs – Continued rising as hurricane concerns grew throughout Florida
- Buyer Considerations – Flood insurance and wind coverage became increasingly important factors in purchase decisions
Development Updates
Despite market challenges, development continued at an impressive pace in St. Johns County:
- Silverleaf – The massive 11,000-acre development continued with plans for 17,600 homes
- Baptist Health – Acquired 33.75 acres in Silverleaf for a future medical campus
- Healthcare Expansion – Medical facility development signaled long-term confidence in the area's growth
Builder Incentives Emerge
As the market shifted, builders responded with increasingly attractive incentives:
- Rate Buy-Downs – Some builders offering temporary or permanent rate buy-downs to as low as 3.99%
- Closing Cost Coverage – Credits of up to $15,000 becoming common
- Upgrade Packages – Free or discounted upgrades to attract buyers
New construction became increasingly attractive compared to existing homes, offering both incentives and modern features.
Q3 2023: What It Meant for Buyers & Sellers
For Buyers:
Q3 2023 marked the first clear signs of buyer leverage in years. While rates were challenging, less competition and builder incentives created opportunities for patient, prepared buyers. The strategy of "marrying the house and dating the rate" (planning to refinance later) became popular.
For Sellers:
Sellers faced new realities: longer days on market, fewer showings, and the need for competitive pricing. Those who adjusted expectations and priced correctly still achieved successful sales. Those who priced for the 2021 market found their homes sitting.
Looking Ahead to Q4 2023
Heading into the fall, expectations centered on whether rates had peaked. The market was poised for a potentially slower holiday season, but savvy buyers and sellers recognized opportunities in the changing landscape.
Calculate how rate changes affect your monthly payment with our Mortgage Calculator.
Navigate the Shift Successfully
Market transitions create both challenges and opportunities. Whether you're buying or selling, having an experienced local agent who understands the changing dynamics is essential. Reach out today for a personalized strategy session tailored to current market conditions.